Conagra’s earnings improve despite declining sales and weaker cash generation

Conagra ($CAG) reported a 1.4% decline in fiscal first-quarter sales and a 1.1% fall on an organic basis, while adjusted earnings per share increased 5.1% to $0.41. Reported net income rose to $174 million, or $0.36 per share. Lower adjusted overhead and stronger equity-method investment earnings helped offset weaker gross profit, with the Ardent Mills venture benefiting from wheat-market conditions.

Cash performance was less favorable: operations used $4 million, against $121 million generated a year earlier, and free cash flow was negative $128 million. The company maintained its full-year forecast for organic sales to decline 1%–3%, adjusted operating margin of 10.0%–10.5%, and adjusted EPS of $1.40–$1.50. The unchanged outlook remains a forecast rather than evidence that consumer-demand pressure has ended.

Sources:

• Company release via PR Newswire